Importation Has Some Huge Risks

This editorial by Jared Whitley was published in NewsMax on September 5, 2018. He is a long-time politico who has worked in the U.S. Congress, White House, and defense industry.

Cheaper Prescription Drugs Through Deregulation, Not Importation

Healthcare is frequently a sore spot for the United States in international comparisons. We conservatives like to insist that “America is No. 1,” and when leftists want to take the wind out of our sails, the first thing they point to is healthcare.

So, healthcare will prove something of a bellwether for President Trump, who has made “America is No. 1” his entire guiding philosophy.

As part of the Trump Administration’s goal to make medicine more affordable, the Food and Drug Administration (FDA) is considering a plan to allow foreign companies to import cheaper prescription drugs, something which is otherwise banned in the United States.

While an alluring idea, importation has some huge risks.

The main one is safety controls: importation allows the distribution of drugs from outside both FDA jurisdiction and the control of the manufacturer. Imports fall outside of the Drug Supply Chain Security Act (DSCSA) which demands accountability from foreign sellers.

The second concern is that plans to allow importation — such as this one from Sen. Bernie Sanders — don’t prohibit transshipment. This is when smugglers and other criminals ship goods via an intermediate destination, like Canada, to hide the original point of origin of their goods. This tactic was used to smuggle millions of counterfeit birth control pills and antibiotics into the United States in the 1980s.

Pacific Research Institute President/CEO Sally C. Pipes said, “There is no way to import drugs from abroad while guaranteeing patients' safety. It would be nearly impossible to source medicines only from reputable suppliers in developed countries.”

Half of illegally imported medications were advertised as Canadian, according to an FDA investigation, but only 15 percent actually were. If a Republican administration cracks the door to this kind of allowance for foreign drugs, a future Democrat administration will blow that door off its hinges.

The third concern is importation doesn’t guarantee any actual savings. In European parallel trade, middle-men keep virtually all of the price difference between markets, according to The London School of Economics, with almost no savings for both payers and consumers.

The fourth concern is this plan does not put America first. In contrast to President Trump’s entire philosophy of governance, this plan would prioritize foreign companies over domestic ones. It’s better for everyone if American drug manufacturers can get out better, cheaper drugs to American patients.

There are certainly things we can learn from other countries’ healthcare successes, but importation is not the right approach. Deregulation is a much better way forward.

U.S. policy on drug innovation is strict. Under current law, drug manufacturers have a patent period of just 20 years before other companies can sell generics, a very small window considering it typically takes 8 years before a drug is deemed safe for consumers.

During that 20-year window, manufacturers have to recoup all the money they spend on R&D — plus any losses from drugs which didn’t get FDA approval. This adds up to billions.

Despite all this cost and red tape, the U.S. leads the world in developing new medicines — indeed, the U.S. innovates more new prescription drugs than the rest of the world combined. (So, yes, the U.S. actually is No. 1 in this aspect of healthcare.)

Furthermore, any plan to make prescription drugs more affordable for Americans must include tort reform. The chance for predatory lawyers to seize massive settlements is factored into the cost of new drugs, an expense which is passed on to patients. America needs President Trump to clamp down on this parasitic trend. The Democrats never will; remember, everything the Democratic Party does is welfare for lawyers.

FDA Administrator Scott Gottlieb has done fantastic work putting the brakes on new regulations, bringing them to a two-decade low. The Economist — the most respected international business magazine in the world — wrote that Gottlieb “should be applauded. Nobody expects the FDA to solve America’s messed-up health-care system, but its goal — of making it cheaper and easier for promising drugs to reach patients — is a step in the right direction.”

A few more steps toward deregulation could make life better for millions.

The Trump Administration’s approach to deregulation has yielded one economic success after another. The stock market has been on the mother of all rallies and unemployment figures are the best they’ve been in decades. Trump’s conservative approach to the economy has won, and it can win with prescription drugs too.